eHealthInsurance.com Investor Relations – News Release

Revenue for the first quarter of 2018 was $43.1 million, a 4% increase
compared to $41.6 million for the first quarter of 2017.

GAAP net loss for the first quarter of 2018 was $4.8 million compared
to net income of $1.1 million for the first quarter of 2017.

Adjusted EBITDA was $(1.2) million for the first quarter of 2018
compared to $(1.0) million for the first quarter of 2017.

Net cash provided by operations for the first quarter of 2018 was
$10.7 million compared to $8.4 million for the first quarter of 2017.

Effective January 1, 2018, eHealth adopted Accounting Standards Update
2014-09, Revenue from Contracts with Customers (ASC 606), using
the full retrospective method. Prior period information presented has
been adjusted to reflect the adoption of this new revenue recognition
standard.

Scott Flanders, chief executive officer of eHealth stated, “We had a
great start to the year at eHealth with double-digit enrollment growth
and 21% revenue growth in the Medicare segment. This growth generated
significant Medicare segment profit as we meaningfully reduced variable
marketing costs per approved member compared to a year ago and continued
to improve customer conversion rates throughout the quarter. We expanded
and strengthened our approach to the Medicare Supplement market with the
acquisition of GoMedigap whose early performance and integration are on
target. Our small group business also performed well with the number of
approved members increasing by more than 50% year-over-year. Only the
individual and family plan business remained challenged for us, although
we expect that recent changes in leadership and our go to market
approach will allow us to gain better traction in the Individual market
later in the year. The company is singularly focused on executing
against the growth targets we established on our year-end earnings call,
and I view our first quarter performance as a strong start toward
achieving those objectives.”

GAAP — First Quarter of 2018 Results

Revenue — Revenue for the first quarter of 2018 totaled $43.1
million, a 4% increase compared to $41.6 million for the first quarter
of 2017. Commission revenue for the first quarter of 2018 totaled $40.7
million, a 5% increase compared to $38.8 million for the first quarter
of 2017. Other revenue for the first quarter of 2018 was $2.4 million, a
13% decrease compared to $2.7 million for the first quarter of 2017.

Revenue from our Medicare segment was $30.8 million for the first
quarter of 2018, a 21% increase compared to $25.4 million for the first
quarter of 2017. Revenue from our Individual, Family and Small Business
segment was $12.3 million for the first quarter of 2018, a 24% decrease
compared to $16.1 million for the first quarter of 2017.

Loss from Operations — Loss from operations for the first quarter
of 2018 was $6.7 million compared to loss from operations of $4.1
million for the first quarter of 2017. Operating margin was (16)% for
the first quarter of 2018 compared to (10)% for the first quarter of
2017.

Pre-tax Loss — Pre-tax loss for the first quarter of 2018 was
$6.5 million compared to pre-tax loss of $3.8 million for the first
quarter of 2017.

Benefit from Income Taxes — Benefit from income taxes for the
first quarter of 2018 was $1.7 million compared to benefit from income
taxes of $4.9 million for the first quarter of 2017.

Net Income (Loss) — Net loss for the first quarter of 2018 was
$4.8 million, or $0.26 net loss per diluted share, compared to net
income of $1.1 million, or $0.06 net income per diluted share, for the
first quarter of 2017.

Segment Profit (Loss)— Profit from our Medicare segment
was $3.2 million for the first quarter of 2018 compared to loss of $0.9
million for the first quarter of 2017. Profit from our Individual,
Family and Small Business segment was $3.5 million for the first quarter
of 2018, a 48% decrease compared to profit of $6.8 million for the first
quarter of 2017.

Non-GAAP — First Quarter of 2018 Results

Non-GAAP Operating Loss & Non-GAAP Net Income — Non-GAAP
operating loss for the first quarter of 2018 was $1.8 million compared
to non-GAAP operating loss of $1.7 million for the first quarter of
2017. Non-GAAP operating margin was (4)% for each of the first quarter
of 2018 and 2017. Non-GAAP net loss for the first quarter of 2018 was
$1.3 million, or $0.07 net loss per diluted share, compared to non-GAAP
net income of $2.5 million, or $0.13 net income per diluted share, for
the first quarter of 2017.

Non-GAAP operating loss and operating margin for the first quarter of
2018 exclude $2.6 million of stock-based compensation expense, $1.9
million of restructuring costs, $0.1 million of acquisition costs
related to our recently completed acquisition of GoMedigap, $0.5 million
of amortization of intangible assets. Non-GAAP net loss and non-GAAP net
loss per diluted share for the first quarter of 2018 exclude $2.6
million of stock-based compensation expense, $1.9 million of
restructuring costs, $0.1 million of acquisition costs related to our
recently completed acquisition of GoMedigap, $0.5 million of
amortization of intangible assets and $1.4 million of benefit for income
tax effect of these adjustments. Non-GAAP operating income for the first
quarter of 2017 excludes $2.1 million of stock-based compensation
expense and $0.3 million of amortization of intangible assets. Non-GAAP
net income and non-GAAP net income per diluted share for the first
quarter of 2017 exclude $2.1 million of stock-based compensation
expense, $0.3 million of amortization of intangible assets and $1.0
million of benefit for income tax effect of these adjustments.

Adjusted EBITDA — Adjusted EBITDA was $(1.2) million for the
first quarter of 2018 compared to $(1.0) million for the first quarter
of 2017. Adjusted EBITDA is calculated by adding stock-based
compensation, depreciation and amortization expense, acquisition costs
related to our recently completed acquisition of GoMedigap,
restructuring costs, amortization of intangible assets, other income
(expense), net and provision (benefit) for income taxes to GAAP net
income (loss).

Membership & Submitted Applications

Submitted Applications —Submitted applications for all Medicare
products, which includes Medicare Advantage, Medicare Supplement and
Prescription Drug Plans were 35,029 applications in the first quarter of
2018, a 12% increase compared to 31,277 applications in the first
quarter of 2017. Submitted applications for individual and family plan
products decreased 70% in the first quarter of 2018 to 6,570
applications compared to 22,011 applications in the first quarter of
2017.

Approved Members —Approved members for all Medicare products,
which includes Medicare Advantage, Medicare Supplement and Prescription
Drug Plans were 34,338 in the first quarter of 2018, a 12% increase
compared to 30,796 applications in the first quarter of 2017. Approved
members for individual and family plan products decreased in the first
quarter of 2018 to 23,899 members compared to 41,403 member in the first
quarter of 2017.

Membership — Total estimated membership as of March 31, 2018 was
893,319 members, which is flat compared to 892,707 estimated members we
reported as of March 31, 2017. Estimated Medicare membership as of
March 31, 2018 was 381,787, a 34% increase compared to 284,865 estimated
members we reported as of March 31, 2017. Estimated individual and
family plan membership as of March 31, 2018 was 182,655 members, a 31%
decrease compared to 265,201 estimated members we reported as of
March 31, 2017.

Cash — First Quarter of 2018

Cash Flows — Net cash provided by operating activities was $10.7
million for the first quarter of 2018 compared to net cash provided by
operating activities of $8.4 million for the first quarter of 2017.

2018 Guidance

eHealth's guidance for the full year ending December 31, 2018 is based
on information available as of April 26, 2018. These expectations are
forward-looking statements, and eHealth assumes no obligation to update
these statements. Actual results may be materially different and are
affected by the risk factors and uncertainties identified in this
release and in eHealth’s annual and quarterly filings with the
Securities and Exchange Commission.

Dave Francis, chief financial and operating officer of eHealth said,
“Our operational outlook for the year remains unchanged and we are
reaffirming the revenue, GAAP net income, adjusted EBITDA, and segment
revenue and profitability guidance for the full year 2018 that we
initially provided on our fourth quarter 2017 earnings call. At the same
time, our reporting of tax obligations as a result of adopting ASC 606
for GAAP purposes changed recently. While this change does not affect
our cash tax expectations for this year, the accounting for our tax
obligations has been adjusted, with the net effect being that we expect
to report an effective full tax rate of approximately 27.5% for 2018 as
opposed to tax expense of minimum cash taxes. As a result, we are
adjusting our financial guidance as it relates to non-GAAP net income.”

eHealth is revising its non-GAAP net income guidance for the full year
ending December 31, 2018 as follows:

Non-GAAP net income per diluted share is expected to be in the range
of $0.69 to $0.95 per share. This compares to our prior expectations
of $0.92 to $1.18 per share.

eHealth is reaffirming its remaining guidance for the full year ending
December 31, 2018 as follows:

Total revenue is expected to be in the range of $217.5 million to
$227.5 million. Revenue from the Medicare segment is expected to be in
the range of $178.5 million to $183.5 million. Revenue from the
Individual, Family and Small Business segment is expected to be in the
range of $39.0 million to $44.0 million.

GAAP net income is expected to be in the range of $1.6 million to $6.6
million.

Adjusted EBITDA(a) is expected to be in the range of $21.9
million to $26.9 million.

Medicare segment profit(b) for the year ending December 31,
2018 is expected to be in the range of $45.5 million to $49.5 million.
Individual, Family and Small Business segment profit(b) for
the year ending December 31, 2018 is expected to be in the range of
$6.0 million to $7.0 million. Corporate(c) shared service
expenses, excluding stock-based compensation and depreciation and
amortization expense, is expected to be approximately $29.5 million.

Adjusted EBITDA per diluted share(e) is expected to be in
the range of $1.13 to $1.39 per share.

(a) Adjusted EBITDA
is calculated by adding stock-based compensation, depreciation and
amortization expense, restructuring charges, acquisition costs,
amortization of intangible assets, other income (expense) and
provision for income taxes to GAAP net income.

(b) Segment
profit is calculated as revenue for the applicable segment less
Marketing and Advertising, Customer Care and Enrollment, Technology
and Content and General and Administrative operating expenses,
excluding stock-based compensation, depreciation and amortization
expense and amortization of intangible assets, that are directly
attributable to the applicable segment and other indirect Marketing
and Advertising, Customer Care and Enrollment and Technology and
Content operating expenses, excluding stock-based compensation,
depreciation and amortization expense and amortization of intangible
assets, allocated to the applicable segment based on usage.

(c)
Corporate consists of other indirect General and Administrative
operating expenses, excluding stock-based compensation and
depreciation and amortization expense, which are managed in a
corporate shared services environment and, since they are not the
responsibility of segment operating management, are not allocated to
the reportable segments.

(e) Adjusted EBITDA per diluted share is
calculated by adding stock-based compensation, depreciation and
amortization expense, restructuring charges, acquisition costs,
amortization of intangible assets, other income (expense) and
provision for income taxes to GAAP net income per share.

Webcast and Conference Call Information

A Webcast and conference call will be held today, Thursday, April 26,
2018 at 5:00 p.m. Eastern / 2:00 p.m. Pacific Time. The Webcast will be
available live on the Investor Relations section on eHealth’s website at http://ir.ehealthinsurance.com.
Individuals interested in listening to the conference call may do so by
dialing (877) 930-8066 for domestic callers and (253) 336-8042 for
international callers. The participant passcode is 2090739. A telephone
replay will be available two hours following the conclusion of the call
for a period of seven days and can be accessed by dialing (855) 859-2056
for domestic callers and (404) 537-3406 for international callers. The
call ID for the replay is 1988118. The live and archived webcast of the
call will also be available on eHealth's website at http://www.ehealthinsurance.com
under the Investor Relations section.

About eHealth, Inc.

eHealth, Inc. (NASDAQ: EHTH) operates eHealth.com,
a leading private online health insurance exchange where individuals,
families and small businesses can compare health insurance products from
leading insurers side by side and purchase and enroll in coverage
online. eHealth offers thousands of individual, family and small
business health plans underwritten by many of the nation's leading
health insurance companies. eHealth (through its subsidiaries) is
licensed to sell health insurance in all 50 states and the District of
Columbia. eHealth also offers educational resources and powerful online
and pharmacy-based tools to help Medicare beneficiaries navigate
Medicare health insurance options, choose the right plan and enroll in
select plans online through PlanPrescriber.com (www.PlanPrescriber.com),
eHealthMedicare.com (www.eHealthMedicare.com)
and Medicare.com (www.Medicare.com)
and GoMedigap.com (www.GoMedigap.com).

Forward-Looking Statements

This press release contains statements that are forward-looking
statements as defined within the Private Securities Litigation Reform
Act of 1995. These include statements regarding our focus on executing
against our growth targets, growth of our Medicare business and
improvement in conversion rates, our approach to the Medicare supplement
market, integration efforts with respect to GoMedigap, expectations
regarding the individual and family business estimates regarding
constrained lifetime values of commissions per member and constraints on
lifetime value by product category, total memberships, Medicare
memberships, Individual and Family plan memberships, ancillaries and
small business memberships, our expected tax rate in 2018 and our
guidance for the full year ending December 31, 2018, including our
guidance for total revenue, revenue from the Medicare segment, revenue
from the Individual, Family and Small Business segment, GAAP net income,
Adjusted EBITDA, profit from the Medicare segment, profit from the
Individual, Family and Small Business segment, Corporate shared service
expense, GAAP net income per share, Non-GAAP net income per share and
Adjusted EBITDA per share.

These forward-looking statements are inherently subject to various risks
and uncertainties that could cause actual results to differ materially
from the statements made. In particular, we are required by the new
revenue recognition standard to make numerous assumptions that are based
upon historical trends and management judgment. These assumptions may
change over time and have a material impact on our revenue recognition,
guidance, and results of operations. Please review the assumptions
stated in this section carefully as well as the disclosures about our
implementation of the new revenue recognition standard in our Form 10-Q
for the fiscal quarter ended March 31, 2018.

Our forward-looking statements are inherently subject to other risks and
uncertainties that could cause actual results to differ materially from
the statements made, including risks associated with the impact of
healthcare reform; our ability to retain existing members and enroll a
large number of new members during the annual healthcare reform open
enrollment period and Medicare annual enrollment period; the impact of
annual enrollment period for the purchase of individual and family
health insurance and its timing on our recognition of revenue; our
ability to sell qualified health insurance plans to subsidy-eligible
individuals and to enroll subsidy eligible individuals through
government-run health insurance exchanges without users leaving our
website for the upcoming open enrollment period; changes in laws and
regulations, including in connection with healthcare reform; our ability
to successfully make and integrate acquisitions; our health insurance
benefit packages' ability to meet individual customer's specific health
insurance and price needs; our ability to comply with CMS guidance and
impact on conversion rates as a result of the federal exchange changes
to enrollment; competition, including competition from government-run
health insurance exchanges; seasonality of our business and the
fluctuation of our operating results; our ability to retain existing
members and limit member turnover; changes in consumer behaviors and
their selection of individual and family health insurance products,
including the selection of products for which we receive lower
commissions; a reduction of product offerings among carriers and the
resulting impact on our commission revenue; carriers exiting the market
of selling individual and family health insurance and the resulting
impact on our supply and commission revenue; our ability to execute on
our growth strategy in the Medicare and small business health insurance
markets; the impact of increased health insurance costs on demand; our
ability to timely receive and accurately predict the amount of
commission payments from health insurance carriers; timing of commission
payments from health insurance carriers; medical loss ratio
requirements; delays in our receipt of items required to recognize
Medicare revenue; changes in member conversion rates; our ability to
accurately estimate membership; our relationships with health insurance
carriers; customer concentration and consolidation of the health
insurance industry; our success in marketing and selling health
insurance plans and our unit cost of acquisition; our ability to hire,
train and retain licensed health insurance agents and other employees;
the need for health insurance carrier and regulatory approvals in
connection with the marketing of Medicare-related insurance products;
costs of acquiring new members; scalability of the Medicare business;
lack of membership growth and retention rates; consumers satisfaction of
our service; changes in competitive landscape; our ability to attract
and to convert online visitors into paying members; changes in products
offered on our ecommerce platform; changes and reductions in commission
rates; maintaining and enhancing our brand identity; our ability to
derive desired benefits from investments in our business, including
membership growth initiatives; dependence on acceptance of the Internet
as a marketplace for the purchase and sale of health insurance; reliance
on marketing partners; the impact of our digital marketing efforts;
timing of receipt and accuracy of commission reports; payment practices
of health insurance carriers; dependence on our operations in China;
compliance with insurance and other laws and regulations; exposure to
security risks; and the performance, reliability and availability of our
ecommerce platform and underlying network infrastructure. Other factors
that could cause operating, financial and other results to differ are
described in eHealth’s most recent Quarterly Report on Form 10-Q or
Annual Report on Form 10-K filed with the Securities and Exchange
Commission and available on the investor relations page of eHealth’s
website at http://www.ehealthinsurance.com
and on the Securities and Exchange Commission’s website at www.sec.gov.
eHealth does not undertake any obligation to update any forward-looking
statement to conform the statement to actual results or changes in
expectations.

Adjusted EBITDA is calculated by adding stock-based compensation,
depreciation and amortization expense, acquisition costs,
restructuring charges, amortization of intangible assets, other income
(expense) and provision (benefit) for income taxes to GAAP net income
(loss).

eHealth believes that the presentation of these non-GAAP financial
measures provide important supplemental information to management and
investors regarding financial and business trends relating to eHealth’s
financial condition and results of operations. Management believes that
the use of these non-GAAP financial measures provides consistency and
comparability with eHealth’s past financial reports. Management also
believes that the items described above provides an additional measure
of eHealth’s operating results and facilitates comparisons of eHealth’s
core operating performance against prior periods and business model
objectives. This information is provided to investors in order to
facilitate additional analyses of past, present and future operating
performance and as a supplemental means to evaluate eHealth’s ongoing
operations. eHealth believes that these non-GAAP financial measures are
useful to investors in their assessment of eHealth’s operating
performance.

Non-GAAP operating income (loss), non-GAAP operating margins, Adjusted
EBITDA, non-GAAP net income (loss), non-GAAP net income (loss) per
diluted share and Adjusted EBITDA per share are not calculated in
accordance with GAAP, and should be considered supplemental to, and not
as a substitute for, or superior to, financial measures calculated in
accordance with GAAP. Non-GAAP financial measures used in this press
release have limitations in that they do not reflect all of the revenue
and costs associated with the operations of eHealth’s business and do
not reflect income tax as determined in accordance with GAAP. As a
result, you should not consider these measures in isolation or as a
substitute for analysis of eHealth’s results as reported under GAAP.
eHealth expects to continue to incur the stock-based compensation costs
and purchased intangible asset amortization costs described above, and
exclusion of these costs, and their related income tax benefits, from
non-GAAP financial measures should not be construed as an inference that
these costs are unusual or infrequent. eHealth compensates for these
limitations by prominently disclosing GAAP operating income (loss), GAAP
operating margins, GAAP net income (loss) and GAAP net income (loss) per
diluted share and providing investors with reconciliations from
eHealth’s GAAP operating results to the non-GAAP financial measures for
the relevant periods.

The accompanying tables provide more details on the GAAP financial
measures that are most directly comparable to the non-GAAP financial
measures described above and the related reconciliations between these
financial measures.

EHEALTH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, unaudited)

December 31,2017

March 31,2018

Assets

Current assets:

Cash and cash equivalents

$

40,293

$

34,742

Accounts receivable

1,475

668

Commissions receivable - current

109,666

98,768

Prepaid expenses and other current assets

4,305

6,008

Total current assets

155,739

140,186

Commissions receivable - non-current

169,751

173,714

Property and equipment, net

4,705

4,616

Other assets

7,287

7,900

Intangible assets, net

7,540

13,889

Goodwill

14,096

40,233

Total assets

$

359,118

$

380,538

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

3,246

$

2,789

Accrued compensation and benefits

15,498

8,718

Accrued marketing expenses

4,693

2,802

Accrued restructuring charges

—

1,053

Earnout liability- current

—

14,580

Other current liabilities

2,008

1,785

Total current liabilities

25,445

31,727

Earnout liability - non-current

—

13,120

Deferred income taxes - non-current

45,089

43,353

Other non-current liabilities

1,920

2,235

Stockholders’ equity:

Common stock

30

30

Additional paid-in capital

281,706

289,925

Treasury stock, at cost

(199,998

)

(199,998

)

Retained earnings

204,725

199,880

Accumulated other comprehensive income

201

266

Total stockholders’ equity

286,664

290,103

Total liabilities and stockholders’ equity

$

359,118

$

380,538

EHEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts, unaudited)

Three Months Ended March 31,

2017

2018

Revenue

Commission

$

38,837

$

40,707

Other

2,719

2,363

Total revenue

41,556

43,070

Operating costs and expenses:

Cost of revenue

181

152

Marketing and advertising

15,055

15,002

Customer care and enrollment

12,109

13,239

Technology and content

8,072

8,341

General and administrative

9,992

10,691

Restructuring charges

—

1,856

Acquisition costs

—

58

Amortization of intangible assets

260

451

Total operating costs and expenses

45,669

49,790

Loss from operations

(4,113

)

(6,720

)

Other income (expense), net

277

184

Loss before benefit for income taxes

(3,836

)

(6,536

)

Benefit for income taxes

(4,916

)

(1,691

)

Net income (loss)

$

1,080

$

(4,845

)

Net income (loss) per share:

Basic

$

0.06

$

(0.26

)

Diluted

$

0.06

$

(0.26

)

Weighted-average number of shares used in per share amounts:

Basic

18,370

18,873

Diluted

18,561

18,873

(1) Includes stock-based compensation as follows:

Marketing and advertising

$

215

$

370

Customer care and enrollment

12

165

Technology and content

394

343

General and administrative

1,512

1,672

Restructuring

—

251

Total stock-based compensation expense

$

2,133

$

2,801

EHEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

Three Months EndedMarch 31,

2017

2018

Operating activities

Net income (loss)

$

1,080

$

(4,845

)

Adjustments to reconcile net income (loss) to net cash provided by
operating activities:

Deferred income taxes

(3,343

)

(1,736

)

Depreciation and amortization

762

619

Amortization of internally developed software

291

477

Amortization of intangible assets

260

451

Stock-based compensation expense

2,133

2,801

Other non-cash items

(59

)

389

Changes in operating assets and liabilities:

Accounts receivable

787

807

Commissions receivable

18,960

22,409

Prepaid expenses and other assets

107

(1,793

)

Accounts payable

(3,417

)

(567

)

Accrued compensation and benefits

(3,023

)

(6,912

)

Accrued marketing expenses

(4,082

)

(1,891

)

Deferred revenue

(190

)

(289

)

Accrued restructuring charges

—

1,053

Accrued expense and other liabilities

(1,838

)

(236

)

Net cash provided by operating activities

8,428

10,737

Investing activities

Capitalized internal-use software and website development costs

(802

)

(989

)

Purchases of property and equipment and other assets

(862

)

(217

)

Acquisition of business, net of cash acquired

—

(14,929

)

Net cash used in investing activities

(1,664

)

(16,135

)

Financing activities

Proceeds from exercise of common stock options

—

109

Cash used to net-share settle equity awards

(300

)

(286

)

Principal payments in connection with capital leases

(32

)

(26

)

Net cash used in financing activities

(332

)

(203

)

Effect of exchange rate changes on cash and cash equivalents

15

50

Net increase (decrease) in cash and cash equivalents

6,447

(5,551

)

Cash and cash equivalents at beginning of period

61,781

40,293

Cash and cash equivalents at end of period

$

68,228

$

34,742

EHEALTH, INC.

SEGMENT INFORMATION

(In thousands, unaudited)

Three Months EndedMarch 31

2017

2018

Revenue

Medicare (1)

$

25,410

$

30,763

Individual, Family and Small Business (2)

16,146

12,307

Total revenue

$

41,556

$

43,070

Segment profit (loss)

Medicare segment profit (loss) (3)

$

(929

)

$

3,180

Individual, Family and Small Business segment profit (3)

6,770

3,488

Total segment profit

5,841

6,668

Corporate (4)

(6,799

)

(7,854

)

Stock-based compensation expense

(2,133

)

(2,550

)

Depreciation and amortization

(762

)

(619

)

Restructuring charges

—

(1,856

)

Acquisition costs

—

(58

)

Amortization of intangible assets

(260

)

(451

)

Other income (expense), net

277

184

Loss before benefit from income taxes

$

(3,836

)

$

(6,536

)

Segment Information

We evaluate our business performance and manage our operations as two
distinct reporting segments:

Medicare and

Individual, Family and Small Business.

(1)

The Medicare segment consists primarily of amounts earned from our
sale of Medicare-related health insurance plans, including Medicare
Advantage, Medicare Supplement and Medicare Part D prescription drug
plans, and to a lesser extent, ancillary products sold to our
Medicare-eligible customers, including but not limited to, dental,
vision, life, short term disability and long term disability
insurance, our advertising program that allows Medicare-related
carriers to purchase advertising on a separate website developed,
hosted and maintained by us and our delivery and sale to third
parties of Medicare-related health insurance leads generated by our
ecommerce platforms and our marketing activities.

(2)

The Individual, Family and Small Business segment consists primarily
of amounts earned from our sale of individual and family and small
business health insurance plans and ancillary products sold to our
non-Medicare-eligible customers, including but not limited to,
dental, vision, life, short term disability and long term disability
insurance. To a lesser extent, the Individual, Family and Small
Business segment consists of amounts earned from our online
sponsorship program that allows carriers to purchase advertising
space in specific markets in a sponsorship area on our website, our
licensing to third parties the use of our health insurance ecommerce
technology and our delivery and sale to third parties of individual
and family health insurance leads generated by our ecommerce
platforms and our marketing activities.

(3)

Segment profit (loss) is calculated as revenue for the applicable
segment less Marketing and Advertising, Customer Care and
Enrollment, Technology and Content and General and Administrative
operating expenses, excluding stock-based compensation, depreciation
and amortization expense, restructuring benefit and amortization of
intangible assets, that are directly attributable to the applicable
segment and other indirect Marketing and Advertising, Customer Care
and Enrollment and Technology and Content operating expenses,
excluding stock-based compensation, depreciation and amortization
expense and amortization of intangible assets, allocated to the
applicable segment based on usage.

(4)

Corporate consists of other indirect General and Administrative
operating expenses, excluding stock-based compensation, depreciation
and amortization expense, which are managed in a corporate shared
services environment and, because they are not the responsibility of
segment operating management, are not allocated to the reportable
segments.

EHEALTH, INC.

SUMMARY OF SELECTED METRICS

COMMISSION REVENUE BY PRODUCT

(In thousands, unaudited)

Three Months Ended

March 31,2017

March 31,2018

PercentChange

Medicare

Medicare Advantage

$

19,205

$

21,935

14 %

Medicare Supplement

3,914

5,592

43 %

Medicare Part D

1,378

1,159

(16)%

Total Medicare

24,497

28,686

17 %

Individual and Family (1)

Non-Qualified Health Plans

3,773

1,441

(62)%

Qualified Health Plans

3,132

2,162

(31)%

Total Individual and Family

6,905

3,603

(48)%

Ancillaries

Short-term

1,846

1,250

(32)%

Dental

1,847

1,599

(13)%

Vision

570

340

(40)%

Other

765

2,391

213 %

Total Ancillaries

5,028

5,580

11 %

Small Business

1,924

2,359

23 %

Commission Bonus

483

479

(1)%

Total Commission Revenue

$

38,837

$

40,707

5 %

(1)

We define our Individual and Family Plan offerings as major medical
individual and family health insurance plans, which does not include
Medicare-related, small business or ancillary plans. Individual and
family health insurance plans include both Qualified and
Non-Qualified plans. Qualified health plans are individual and
family health insurance plans that meet the requirements of the
Affordable Care Act and are offered through the government-run
health insurance exchange in the relevant jurisdiction.
Non-Qualified health plans are individual and family health
insurance plans that meet the requirements of the Affordable Care
Act and are not offered through the exchange in the relevant
jurisdiction. Individuals that purchase Non-Qualified health plans
cannot receive a subsidy in connection with the purchase of those
plans.

EHEALTH, INC.

SUMMARY OF SELECTED METRICS

SUBMITTED APPLICATIONS

(Unaudited)

Three Months Ended March 31,

2017

2018

PercentChange

Medicare (1)

Medicare Advantage

21,799

24,796

14 %

Medicare Supplement

4,540

6,388

41 %

Medicare Part D

4,938

3,845

(22)%

Total Medicare

31,277

35,029

12 %

Individual and Family (2)

Non-Qualified Health Plans

14,264

3,886

(73)%

Qualified Health Plans

7,747

2,684

(65)%

Total Individual and Family

22,011

6,570

(70)%

Ancillaries (3)

Short-term

24,285

19,495

(20)%

Dental

23,378

12,993

(44)%

Vision

9,857

5,584

(43)%

Other

4,699

13,341

184 %

Total Ancillaries

62,219

51,413

(17)%

Small Business (4)

1,162

1,720

48 %

Total Submitted Applications

116,669

94,732

(19)%

Submitted Applications

Applications are counted as submitted when the applicant completes the
application and either clicks the submit button on our website or
provides verbal authorization to submit the application. The applicant
may have additional actions to take before the application will be
reviewed by the insurance carrier, such as providing additional
information. In addition, an applicant may submit more than one
application.

Major medical Individual and Family plan ("IFP") health insurance
applications submitted on our website during the period. An
applicant may submit more than one application. We define our IFP
offerings as major medical individual and family health insurance
plans, which does not include Medicare-related, small business or
ancillary plans.

Applications for small business health insurance applications are
counted as submitted when the applicant completes the application,
the employees complete their applications, the applicant submits the
application to us and we submit the application to the carrier.

EHEALTH, INC.

SUMMARY OF SELECTED METRICS

APPROVED MEMBERS

(Unaudited)

Three Months Ended March 31,

2017

2018

PercentChange

Medicare

Medicare Advantage

21,465

24,620

15 %

Medicare Supplement

4,199

5,416

29 %

Medicare Part D

5,132

4,302

(16)%

Total Medicare

30,796

34,338

12 %

Individual and Family

Non-Qualified Health Plans

24,799

9,213

(63)%

Qualified Health Plans

16,604

14,686

(12)%

Total Individual and Family

41,403

23,899

(42)%

Ancillaries

Short-term

21,251

20,996

(1)%

Dental

24,734

19,524

(21)%

Vision

10,753

6,595

(39)%

Other

5,028

9,026

80 %

Total Ancillaries

61,766

56,141

(9)%

Small Business

3,484

5,294

52 %

Total Approved Members

137,449

119,672

(13)%

Approved Members

Approved Members represents the number of individuals on submitted
applications that were approved by the relevant insurance carrier for
the identified product during the relevant period. Approved members may
not pay for their plan and become paying members.

EHEALTH, INC.

SUMMARY OF SELECTED METRICS

ESTIMATED MEMBERSHIP

(Unaudited)

Three Months EndedMarch 31,

2017

2018

PercentChange

Medicare (1)

Medicare Advantage

174,561

218,685

25 %

Medicare Supplement

24,654

58,507

137 %

Medicare Part D

85,650

104,595

22 %

Total Medicare

284,865

381,787

34 %

Individual and Family (2)

265,201

182,655

(31)%

Ancillaries (3)

Short-term

20,821

15,467

(26)%

Dental

181,422

162,570

(10)%

Vision

86,294

79,872

(7)%

Other

23,361

35,423

52 %

Total Ancillaries

311,898

293,332

(6)%

Small Business (4)

30,743

35,545

16 %

Total Estimated Membership

892,707

893,319

— %

Estimated Membership

Estimated membership represents the estimated number of members active
as of the date indicated based on the number of members for whom we have
received or applied a commission payment during the month of estimation.

(1)

For Medicare-related health insurance plans, we take the sum of (i)
the number of members for whom we have received or applied a
commission payment for a month that is up to two months prior to the
date of estimation (after reducing that number using historical
experience for assumed member cancellations over the period being
estimated); and (ii) the number of approved members over that period
(after reducing that number using historical experience for an
assumed number of members who do not accept their approved policy
from the same month of the previous year and for estimated member
cancellations through the date of the estimate). To the extent we
determine we have received substantially all of the commission
payments related to a given month during the period being estimated,
we will take the number of members for whom we have received or
applied a commission payment during the month of estimation.
Estimated number of members active on Medicare-related health
insurance as of the date indicated based on the number of members
for whom we have received or applied a commission payment during the
month of estimation.

(2)

To estimate the number of members on Individual and Family health
insurance plans, we take the sum of (i) the number of IFP members
for whom we have received or applied a commission payment for a
month that is up to six months prior to the date of estimation after
reducing that number using historical experience for assumed member
cancellations over the period being estimated; and (ii) the number
of approved members over that period (after reducing that number by
the percentage of members who do not accept their approved policy
from the same month of the previous year for estimated member
cancellations through the date of the estimate). To the extent we
determine we have received substantially all of the commission
payments related to a given month during the period being estimated,
we will take the number of members for whom we have received or
applied a commission payment during the month of estimation. For IFP
health insurance plans, a member who purchases and is active on
multiple standalone insurance plans will be counted as a member more
than once. For example, a member who is active on both an individual
and family health insurance plan and a standalone dental plan will
be counted as two continuing members.

EHEALTH, INC.

SUMMARY OF SELECTED METRICS

ESTIMATED MEMBERSHIP (Continued)

(Unaudited)

(3)

For ancillary health insurance plans (such as short-term, dental and
vision insurance), we take the sum of (i) the number of members for
whom we have received or applied a commission payment for a month
that is up to three months prior to the date of estimation (after
reducing that number using historical experience for assumed member
cancellations over the period being estimated); and (ii) the number
of approved members over that period (after reducing that number
using historical experience for an assumed number of members who do
not accept their approved policy from the same month of the previous
year and for estimated member cancellations through the date of the
estimate). To the extent we determine we have received substantially
all of the commission payments related to a given month during the
period being estimated, we will take the number of members for whom
we have received or applied a commission payment during the month of
estimation. The one to three-month period varies by insurance
product and is largely dependent upon the timeliness of commission
payment and related reporting from the related carriers.

(4)

For small business health insurance plans, we estimate the number of
members using the number of initial members at the time the group is
approved, and we update this number for changes in membership if
such changes are reported to us by the group or carrier in the
period it is reported. However, groups generally notify the carrier
directly of policy cancellations and increases or decreases in group
size without informing us. Health insurance carriers often do not
communicate policy cancellation information or group size changes to
us. We often are made aware of policy cancellations and group size
changes at the time of annual renewal and update our membership
statistics accordingly in the period they are reported.

Health insurance carrier’s bill and collect insurance premiums paid by
our members. The carriers do not report to us the number of members that
we have as of a given date. The majority of our members who terminate
their policies do so by discontinuing their premium payments to the
carrier and do not inform us of the cancellation. Also, some of our
members pay their premiums less frequently than monthly. Given the
number of months required to observe non-payment of commissions in order
to confirm cancellations, we estimate the number of members who are
active on insurance policies as of a specified date.

After we have estimated membership for a period, we may receive
information from health insurance carriers that would have impacted the
estimate if we had received the information prior to the date of
estimation. We may receive commission payments or other information that
indicates that a member who was not included in our estimates for a
prior period was in fact an active member at that time, or that a member
who was included in our estimates was in fact not an active member of
ours. For instance, we reconcile information carriers provide to us and
may determine that we were not historically paid commissions owed to us,
which would cause us to have underestimated membership. Conversely,
carriers may require us to return commission payments paid in a prior
period due to policy cancellations for members we previously estimated
as being active. We do not update our estimated membership numbers
reported in previous periods. Instead, we reflect updated information
regarding our historical membership in the membership estimate for the
current period. As a result of the delay in our receipt of information
from insurance carriers, actual trends in our membership are most
discernible over periods longer than from one quarter to the next. As a
result of the delay we experience in receiving information about our
membership, it is difficult for us to determine with any certainty the
impact of current conditions on our membership retention. Health care
reform and its impacts as well as other factors could cause the
assumptions and estimates that we make in connection with estimating our
membership to be inaccurate, which would cause our membership estimates
to be inaccurate.

EHEALTH, INC.

SUMMARY OF SELECTED METRICS

CONSTRAINED LIFETIME VALUE OF

COMMISSIONS PER APPROVED MEMBER

(Unaudited)

Three Months EndedMarch 31,

2017

2018

PercentageChange

Medicare

Medicare Advantage (1)

$

892

$

880

(1)%

Medicare Supplement (1)

$

932

$

1,029

10 %

Medicare Part D (1)

$

268

$

270

1 %

Individual and Family

Non-Qualified Health Plans (1)

$

139

$

140

1 %

Qualified Health Plans (1)

$

134

$

134

— %

Ancillaries

Short-term (1)

$

87

$

60

(31)%

Dental (1)

$

71

$

74

4 %

Vision (1)

$

53

$

51

(4)%

Small Business (2)

$

168

$

178

6 %

Constrained Lifetime Value of Commissions Per
Approved Member

(1)

Constrained lifetime value (“LTV”) of commissions per approved
member represents commissions estimated to be collected over the
estimated life of an approved member’s policy after applying
constraints in accordance with our revenue recognition policy. The
estimate is driven by multiple factors, including but not limited
to, contracted commission rates, carrier mix, expected policy churn
and applied constraints. These factors may result in varying values
from period to period.

(2)

For Small Business the amount represents the estimated commissions
we expect to collect from the plan over the following 12-months. The
estimate is driven by multiple factors, including but not limited
to, contracted commission rates, carrier mix, expected policy churn
and applied constraints. These factors may result in varying values
from period to period.

EHEALTH, INC.

SUMMARY OF SELECTED METRICS

CONSTRAINTS ON LIFETIME VALUE

OF COMMISSIONS PER APPROVED MEMBER

(Unaudited)

Three Months EndedMarch 31,

2017

2018

Medicare

Medicare Advantage

7

%

7

%

Medicare Supplement

5

%

5

%

Medicare Part D

5

%

5

%

Individual and Family

Non-Qualified Health Plans

15

%

15

%

Qualified Health Plans

20

%

20

%

Ancillaries

10

%

10

%

Small Business

—

—

Constraints on Lifetime Value of Commissions
Per Approved Member

Constraints are applied to derive the constrained lifetime value ("LTV")
of commissions per approved member for revenue recognition in accordance
with our revenue recognition policy. The constraints are applied to help
ensure that commissions estimated to be collected over the estimated
life of an approved member’s plan are recognized as revenue only to the
extent that is it probable that a significant reversal in the amount of
cumulative revenue recognized will not occur when the uncertainty
associated with future commissions receivable from the plan is
subsequently resolved. We evaluate constraints on an annual basis for
factors affecting our estimate of LTV of commissions per approved member
and apply management judgment to determine the constraints based on
current trends impacting our business.

Individual and Family Plan ("IFP") variable marketing cost per
approved IFP-equivalent member (2)

$

35

$

41

17 %

Customer care and enrollment ("CC&E") expense per approved member

Medicare CC&E expense per approved MA-equivalent member (3)

$

337

$

350

4 %

IFP CC&E expense per approved IFP-equivalent member (4)

$

42

$

43

2 %

Expense Metrics Per Approved Member

(1)

Variable marketing cost per approved MA-equivalent member represents
direct costs incurred in member acquisition for Medicare Advantage,
Medicare Supplement and Medicare Part D plans from our direct,
marketing partners and online advertising channels divided by
MA-equivalent approved members in a given period. MA-equivalent
members is a derived metric and is equal to the sum of Medicare Part
D approved members divided by 4, the number of Medicare Advantage
approved members and the number of Medicare Supplement approved
members in the given period.

(2)

Variable marketing cost per approved IFP-equivalent member
represents direct costs incurred in member acquisition for IFP plans
from our direct, marketing partners and online advertising channels
divided by IFP-equivalent approved members in a given period.
IFP-equivalent approved members is a derived metric and is equal to
the sum of the number of short-term approved members divided by 3
and the IFP approved members in the given period.

(3)

Medicare CC&E expense per approved MA-equivalent member is equal to
the CC&E expense of our Medicare business included in our operating
costs and reported in our condensed consolidated statements of
operations divided by MA-equivalent approved members in a given
period. MA-equivalent approved members is a derived metric and is
equal to the sum of Medicare Part D approved members divided by 4,
the number of Medicare Advantage approved members and the number of
Medicare Supplement approved members in the given period.

(4)

IFP CC&E expense per approved IFP-equivalent member is equal to the
CC&E expense of our IFP business included in our operating costs and
reported in our condensed consolidated statement of operations
divided by IFP-equivalent approved members in a given period.
IFP-equivalent approved members is a derived metric and is equal to
the sum of the number of short-term approved members divided by 3
and the IFP approved members in the given period.

Non-GAAP net income (loss), Non-GAAP net income (loss) per share and
Adjusted EBITDA exclude provision (benefit) for income taxes.

(6)

Adjusted EBITDA excludes depreciation and amortization.

(7)

Adjusted EBITDA excludes other income (expense), net.

EHEALTH, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GUIDANCE

(In millions, except per share amounts, unaudited)

Year EndingDecember 31,2018

Adjusted EBITDA:

GAAP net income

$1.6 - $6.6

Stock-based compensation expense

11.9

Depreciation and amortization

3.2

Amortization of intangible assets

2.1

Restructuring charges

2.1

Acquisition charges

0.1

Other income (expense), net

(0.7)

Provision for income taxes

1.6

Adjusted EBITDA (1)

$21.9 - $26.9

Adjusted EBITDA Per Diluted Share:

GAAP net income per diluted share

$0.08 - $0.34

Stock-based compensation expense

0.61

Depreciation and amortization

0.17

Amortization of intangible assets

0.11

Restructuring charges

0.11

Acquisition costs

0.01

Other income (expense), net

(0.04)

Provision for income taxes

0.08

Adjusted EBITDA per diluted share (2)

$1.13 - $1.39

Non-GAAP Net Income Per Diluted Share:

GAAP net income per diluted share

$0.08 - $0.34

Stock-based compensation expense

0.61

Amortization of intangible assets

0.11

Restructuring charges

0.11

Acquisition costs

0.01

Provision for income taxes

(0.23)

Non-GAAP net income per diluted share (3)

$0.69 - $0.95

Explanation of Adjustments

(1)

Adjusted EBITDA is calculated by adding stock-based compensation,
depreciation and amortization expense, restructuring charges,
amortization of intangible assets, other income (expense) and
provision for income taxes to GAAP net income.

(2)

Adjusted EBITDA per diluted share is calculated by adding
stock-based compensation, depreciation and amortization expense,
restructuring charges, amortization of intangible assets, other
income (expense) and provision for income taxes to GAAP net income
per share.